Section 3209(b)(2)(C) has been added to the New York Insurance Law and applies to both life
policies and annuity contracts whether or not they are illustrated. Section 3209(b)(2) reads
in part as follows:

(2) no annuity contract or life insurance policy or certificate with an equity index account shall
be delivered or issued for delivery in this state unless, no later than at the time of application,
the prospective purchaser has been provided with a disclosure statement containing the following:

…(C) a statement indicating
whether paid dividends are included in changes in the equity index, together with a description
of how such dividends, or lack thereof, would affect the changes in the equity index; the
statement must provide the average dividend rate over the lesser of ten years or the calculable
life of the index;

The following is guidance on calculating and communicating the average dividend rate required by
Section 3209(b)(2)(C).

This average dividend rate should be calculated on the most recent completed 10 calendar years
and be provided as the average dividend rate in communications by the first of the month following
the end of the latest completed calendar year (i.e., by February 1 the average dividend rate for
the most recent 10 completed calendar years would be provided in the disclosure required by Section
3209(b)(2)(C)). The average dividend rates may be rounded to the nearest 0.1%.

The dividend rate for a year is calculated as (a)-(b) where:

(a) is the value at the end of the year of $1 invested at the beginning of the year in the securities
underlying the index with any dividends during the year reinvested in the underlying securities.

(b) is the value at the end of the year of $1 invested at the beginning of the year in the securities
underlying the index where any dividends are ignored.

If the composition of the securities underlying the index change during the year, the values in
(a) and (b) should be adjusted accordingly.

The following are examples of Section 3209(b)(2)(C) disclosure that would be satisfactory to the
Department. For these examples, the index used is the S&P 500® Index for the ten
year period ending December 31, 2007. This information was derived from the Standard and
Poor’s Website http://www2.standardandpoors.com/spf/xls/index/MONTHLY.xls

S&P 500

Year
Ending

(a)
Total Return

(b)
Index Without Dividends

(a)-(b) Dividend Component

12/31/2007

5.49%

3.53%

1.96%

12/29/2006

15.79%

13.62%

2.17%

12/31/2005

4.91%

3.00%

1.91%

12/31/2004

10.88%

8.99%

1.89%

12/31/2003

28.69%

26.38%

2.31%

12/31/2002

-22.10%

-23.37%

1.26%

12/31/2001

-11.89%

-13.04%

1.16%

12/29/2000

-9.10%

-10.14%

1.03%

12/31/1999

21.04%

19.53%

1.52%

12/31/1998

28.58%

26.67%

1.91%

Arithmetic
Average

1.71%

During this ten year period, the arithmetic average of the annual dividend returns in the S&P
500 index was 1.71%.

Examples:

If dividends are not included, the following is satisfactory disclosure for the period from February
1, 2008 through January 31, 2009.

The index used in determining the interest crediting is the S&P 500 Index without dividends. Dividends
paid on the securities underlying the index are not included in the index return. Over the
ten year period ending December 31, 2007 the returns on the index were lower by an average of
1.7% each year compared to the same index with dividends.

If dividends are included, the following is satisfactory disclosure for the period from February
1, 2008 through January 31, 2009.

The index used in determining the interest crediting is the S&P 500 Index with
dividends. Dividends
paid on the securities underlying the index are included in the index. Over the ten year
period ending December 31, 2007, the returns on the index were higher by an average of 1.7% each
year compared to the same index without dividends.